Microsoft Corporation
’s
MSFT
highly-awaited next-generation Xbox consoles are now available on retail shelves worldwide. The two models namely, Xbox X and Xbox S, are priced at $499 and $299, respectively.
Microsoft is looking to boost its market share against peers like
Sony Corporation
SNE
in the video game console space with a worldwide launch of next gen Xbox consoles. Interestingly, the launch of new Xbox consoles precedes Sony’s PlayStation 5 release, which will likely help it gain market share.
Sony’s PlayStation 5 console will be
rolled out
in North America, and Mexico on Nov 12. PlayStation 5 becomes available in Europe and United Kingdom from Nov 19.
Microsoft Corporation Price and Consensus
Microsoft Corporation price-consensus-chart
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Microsoft Corporation Quote
In terms of price point, both the consoles are competitively priced. Sony’s PlayStation 5 carries a price tag of $499.99 in the United States.
The uptick in gaming activity across the globe triggered by COVID-19 crisis and subsequent shelter-in-place guidelines are also expected to benefit sales of latest consoles.
Impressive Specifications to Drive Xbox Sales
Microsoft has made
significant
upgrades to the next-gen consoles, which will enhance gaming experience. Both Xbox Series X and Series S consoles feature latest Hardware Accelerated DirectX Raytracing (DXR) capability, that will offer next-gen gamers with augmented audio and visual experience.
Xbox Series X utilizes
Advanced Macro Devices
‘
AMD
7 nanometer (nm) technology based on 8 core Zen 2 architecture CPU. It has an RDNA 2-class GPU, which boasts 12 teraflops of processing power.
Series X also has a high bandwidth 16 GB GDDR6 memory and NVME SSD (solid state drive) offering internal storage capacity of 1 TB. It also has an additional storage expansion card for 1 TB.
On the other hand, Xbox Series S supports 1440p resolution at up to 120 FPS and will support 4K upscaling for games. Also, it will have a NVME SSD storage of 512 MB.
The specifications look bleak compared with its flagship model Xbox series X. However, with the launch of a cheaper priced console, it looks like Microsoft is trying to draw casual and non-gamers who refrain from spending money on high end consoles.
The new consoles have an
impressive
lineup of 40 optimized titles (
Assassin’s Creed Valhalla, Borderlands 3, Cuisine Royale, Fortnite, Yakuza: Like a Dragon, Forza Horizon 4, Watch Dogs: Legion, Gears Tactic
s, and
Tetris Effect: Connected
) that can be played at launch.
Going ahead, Microsoft will add plethora of new games that include
Destiny 2: Beyond Light
and
Call of Duty: Black Ops Cold War
to Xbox S and Xbox X.
Xbox Game Pass Service to Boost Console Sales
Microsoft has been expanding its game library for its Game Pass subscription service to attract more takers for its consoles and consolidate its competitive stance against Sony and Nintendo.
The company collaborated with
Electronic Arts
EA
to bundle the latter’s EA Play service with its Xbox Game Pass subscription at no extra cost. With EA Play, Ultimate Pass subscribers can access over 60 popular EA titles (
FIFA 20, Battlefield, Titanfall
and
Need For Speed
) on Xbox Series S and X consoles along with Xbox One.
The company also integrated its cloud gaming service with its Game Pass subscription. The xCloud integration allows Ultimate Pass subscribers to access more than 100 game titles (
Minecraft Dungeons, Destiny 2
, and
Tell Me Why
) on any devices (PC, mobile or console) anywhere at any time.
Going ahead, with the Bethesda buyout, Microsoft will be adding Bethesda titles to the Game Pass library.
To Wrap Up
Nonetheless, the delay in the launch of Microsoft’s Halo Infinite is an overhang. The title was meant to be launched this year around the holiday season, but the release was postponed to 2021 mostly due to COVID-19 crisis.
Also, Sony’s PlayStation has an edge over Xbox consoles if we take into consideration the sales of last generation consoles. Per
VGChartz data
, total lifetime sales of PlayStation 4 through October 2020 were 113.8 million units, outselling 48.5 million units of Xbox One.
Also, PlayStation 4 dominated the console market in terms of total sales through October 2020, with 49.5% market share, outpacing Nintendo’s Switch and Xbox One market shares of 29.4% and 21.1%, respectively, added the VGChartz report.
A
Statista report
projects Xbox Series X sales in 2020 to be around 3.3 million. By 2023, PlayStation 5 and Xbox Series X are projected to sell 50 million and 30 million units, respectively, added the report.
Nevertheless, given the ample buzz surrounding its latest consoles, management had guided gaming revenues to be up in the high 20% range year over year in the second quarter of fiscal 2021 (ending December 2020).
At present, Microsoft carries a Zacks Rank #2 (Buy). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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